CoreWeave Credit Default Swaps Exceed 1100 Basis Points Amid AI Financing Concerns
Key Facts
CoreWeave's five-year credit default swap spreads exceeded 1100 basis points on October 15, Reuters reported, citing S&P Global Market Intelligence data, amid concerns over the cost of financing the expansion of artificial intelligence infrastructure. The pressure extended to the company's bonds, with the yield on its bond due in 2031 climbing to 16% that day. The yield subsequently fell to around 14%, according to the news agency. In a report published on October 16, Reuters said other company bonds, issued in June at a yield of 9.675%, fell in price, pushing their yield to 15% during the week of the report. These debt-market moves coincided with sharp swings in cloud computing stocks as concerns mounted over the cost of financing their expansion.
CoreWeave's results for the second quarter of 2026 showed revenue growth accompanied by higher financing costs and widening losses. Revenue reached $2575 million, compared with $1212 million in the corresponding period of 2025, according to the company's earnings statement. Net interest expense rose to $640 million from $267 million in the same period a year earlier. In its quarterly filing, the company attributed the increase to "higher levels of borrowing and total debt obligations." The net loss widened to $626 million from $290 million in the corresponding quarter, despite higher revenue.
Total future debt principal payments stood at $35,551 million at the end of June, according to the repayment schedule in CoreWeave's filing with the U.S. Securities and Exchange Commission. This figure represents the debt principal payable under the schedule. Separately, the company recorded substantial lease obligations at the end of the same period. The present value of operating lease liabilities totaled $16,319 million, according to the filing. The present value of finance lease liabilities stood at $221 million, reported separately from operating leases and debt principal.
Against these financial burdens, the contracted revenue backlog stood at $104.2 billion at the end of the second quarter, according to Reuters. New customer commitments exceeding $25 billion were added at the start of the third quarter. Microsoft remained a major source of CoreWeave's revenue, accounting for around 67% in 2025, up from 62% in 2024, according to the news agency. In a financing announcement dated August 10, CoreWeave said the facility had a term of approximately 5 years. That exceeds the average term of the underlying customer contracts of 3 years, highlighting the importance of renewing contracts or re-leasing computing capacity over the life of the financing. The company said the facility's term extending beyond the contracts reflected "lenders' confidence in long-term demand for graphics processing units."
Jensen Huang defended CoreWeave's position on October 15, saying "CoreWeave's financial strength is improving every day," according to Reuters. He added that he saw no need for Nvidia to provide it with a financial backstop. Shares of Nebius and CoreWeave had fallen 15.1% and 9.5%, respectively, during trading on October 14 amid financing concerns. But CoreWeave shares rebounded during the following day's trading, gaining around 5% at the time Reuters updated its report, after falling as much as 8.3% earlier in the session. On October 19, Goldman Sachs upgraded the stock to "buy" from "neutral," citing scarce computing capacity and the company's outperformance relative to its neocloud competitors.
CoreWeave faces near-term debt principal maturities, according to the repayment schedule disclosed at the end of June. A total of $4413 million falls due during the remainder of 2026. That is followed by $6184 million due during 2027, according to the company's filing. Across the sector, Reuters on October 16 cited Gartner's forecast that 80% of neocloud providers would cease operating independently by 2030. This forecast concerns the loss of operational independence, a broader outcome than bankruptcy alone.